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Grounds publishedDecided 10 Feb 2009
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High Court

Lim Eng Hock Peter v Lin Jian Wei and Another

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[2009] SGHC 31Case no. Suit 514/2007

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  1. [1] In this action, the plaintiff, Mr Peter Lim Eng Hock (“Mr Lim”), a businessman, seeks damages in respect of certain allegedly defamatory passages in an Explanatory Statement (“ES”) dated 2 November 2005, issued by Raffles Town Club Pte Ltd (“the Company”) purportedly to explain the Scheme of Arrangement and Compromise (“Scheme”) that the Company was proposing to its members.

  2. [2] The plaintiff is by no means a stranger to the chain of litigation that has dogged the Company since early 2000 and this action marks yet another chapter in this protracted saga. The plaintiff claims that he was a former “consultant” to the Company which owns a proprietary club known as the Raffles Town Club (“the Club”), situated at 1 Plymouth Avenue and had assisted Europa Holdings Pte Ltd (“Europa Holdings”) and the Company to raise monies to complete the construction of the Club.

  3. [3] The first defendant, Mr Lin Jian Wei, and the second defendant, Ms Margaret Tung Yu-Lien, are presently the directors and shareholders of the Company and were also the directors and shareholders of the Company at the time the ES was published. The plaintiff alleges that the defamatory statements in the ES were either made or authorised by the defendants.

  4. Background to the present proceedings

  5. [4] In Lim Eng Hock Peter v Lin Jian Wei and Another [2008] SGHC 108, the defendants had applied to strike out the plaintiff’s action and sought a determination under O 14 r 12 of the Rules of Court (Cap 332, R5, 2006 Rev Ed) that the allegedly defamatory words referred to in the statement of claim were not defamatory in nature.

  6. [5] This application was heard before Tan Lee Meng J and he dismissed the application and held that it was not a case where there ought to be a preliminary ruling under O 14 r 12. The background to this action was set out comprehensively by Tan J (at [3] to [20] of his Grounds of Decision (“GD”)). By way of a prelude to the discussion below, the background to this action can be dealt within a brief compass.

  7. [6] At the inception of the Company, the only shareholders and directors were Mr Lawrence Ang Yee Lim (“Mr Ang”), Mr William Tan Leong Ko (“Mr Tan”) and Mr Dennis Foo Jong Long (“Mr Foo”). Sometime in March 1996, bids were invited for a plot of land at Plymouth Avenue. The highest bid of $100 million (and more than twice the next highest offer) for a 30-year lease of the land came from Europa Holdings. In May 1996, the plaintiff was approached to assist Europa Holdings in meeting its substantial payment obligations to the Urban Redevelopment Authority for payment of the purchase price. He agreed to do so and on 11 July 1996, the Company was incorporated as a wholly-owned subsidiary of Europa Holdings. The Company decided to venture into setting up Singapore’s first prestigious private proprietary club at the site.

  8. [7] In August 1996, an alleged oral agreement was reached between Mr Ang, Mr Tan, Mr Foo and the plaintiff whereby in return for his assistance to Europa Holdings in raising monies to complete the construction of the Club, the plaintiff would receive a 40% stake in Europa Holdings upon its successful opening. He would also stand to receive “consultancy fees” for other services he rendered to the Club from 1996 to 2000.

  9. [8] In November 1996, the Company invited selected members of the public to join the Club at a discounted price of $28,000. These founding members were baited by promises of joining one of the most prestigious and lavish city clubs in Singapore. Over 24,000 applications were received and about 5,000 of these applications were rejected.

  10. [9] In March 2000, the Club began its operations and it was then that its members started to realise that there was overcrowding at the premises and its various facilities. In actual fact, the directors and shareholders of the Company did not reveal to the members that their prestigious club had taken on more than 19,000 members in total. The successful membership launch meant that the Company would be receiving a considerable amount of cash amounting to over $500 million to be collected from the members over 4 years, viz, the period allowed for the instalment plan for payment of their membership entrance fees, quite apart from the monthly subscription fees that would have to be paid by them after the Club opened.

  11. [10] Disputes arose between the plaintiff and the then shareholders of the Company sometime in September 2000 and the plaintiff was “embroiled in the following suits” ([4] supra, see [6] of GD):

  12. (a) In the first suit, [the plaintiff] sued the former shareholders of the Company (Mr Ang, Mr Tan and Mr Foo) for specific performance of [the] oral agreement, under which he was entitled to 40% of the shares in the Company;

  13. (b) In the second suit, the Company sued Mr Ang for advances of more than $51m that had been made out to him. Mr Ang joined the plaintiff as a third party, claiming that $26.6m had been handed over to the latter;

  14. (c) In the third suit, the Company sued Mr Tan for advances of almost $6m that had been made out to him; and

  15. (d) In the fourth suit, Mr Ang and Mr Tan sued [the plaintiff] and Mr Foo, alleging that the latter two had wrongly converted to their own use certain bearer share certificates.

  16. [11] In April 2001, these suits were settled by the parties. Under the terms of the deed of settlement dated 19 April 2001, Mr Foo’s shares in the Company were to vest in Mr Ang and Mr Tan, who then entered into a ‘back to back’ sale of 50% of the shares in the Company to the defendants. This settlement was facilitated by the defendants who provided financial assistance to Mr Ang and Mr Tan. Further, the defendants also agreed that the loans granted by the Company to Mr Ang and Mr Tan did not need to be repaid to the Company and that such loans were to be set off against dividends. The Company therefore discontinued their actions against Mr Ang and Mr Tan for the return of such loans ([10], (b) and (c) above).

  17. [12] What emerged from the proceedings, however, was the revelation to the public that the Club in fact, had taken on 19,000 members. Given the Club’s promises of providing an exclusive membership, this sent ripples through the Club’s members, who were understandably not happy that their prestigious private city club was not so exclusive after all.

  18. [13] Between April to June 2001, there was a change in management of the Company. In fact, the 2 defendant was appointed as an executive director of the Company on 30 April 2001. It was admitted by the 2 defendant (through her lawyers' correspondence with M/s Harry Elias Partnership and the Securities Industry Council) that this was because she wanted to familiarise herself with the operations of the Company. On 30 April 2001, the 2 defendant had even signed off on various directors' resolutions, including approving the transfer of Mr Foo's shares in the Company to Mr Ang, this being one of the terms of the deed of settlement dated 19 April 2001.

  19. [14] The defendants’ and the first defendant’s wife’s acquisition of all the shares in the Company from the former shareholders was effected through:

  20. [15] As at April 2001, it must be noted the Company had current assets of $206 million, consisting of cash reserves of $114 million (in fixed deposits and cash and bank balances), short-term investments of $27 million and receivables of $65 million in directors’ and/or shareholders’ loans. This was what was available as current assets in the Company just before the plaintiff exited the Company and just before the defendants became involved with the Company commencing on 30 April 2001. This strong financial position of the Company in April 2001 is undisputed and has not been challenged by counsel for the defendants during the cross-examination of the plaintiff. It is also not disputed that this strong financial position was principally due to a certain deferred tax and accounting policy (“Deferred Accounting Policy”) (see [16] below) that was put in place while the plaintiff was still involved in the Company.

  21. The plaintiff institutionalised the “Deferred Accounting Policy” for the Company

  22. [16] That it was the plaintiff who put in place the “Deferred Accounting Policy” for the Company is not seriously disputed by the defendants. I will now set out the submissions of the plaintiff detailing the evidence on this issue which I have no reason not to accept:

  23. [17] Counsel for the plaintiff poignantly submitted that this “Deferred Accounting Policy” which was designed for the members' benefit, was later deliberately changed by the defendants for their own personal benefit.

  24. Change of accounting policy in the Company

  25. [19] With the defendants coming on board, a change in the accounting policy was instituted immediately. First, as part of their buy-out of Mr Ang’s and Mr Tan’s shares in the Company, the defendants agreed to allow the directors’ and shareholders’ loan of $65 million owed by them not to be repaid. In effect, they agreed to change the accounting policy to recognise the entrance fees as profits, pay tax on these profits and declare dividends to off-set the loans. The corollary of this however, was that the Company incurred an immediate tax liability of over $100 million regardless of any instalment payment scheme for the entrance fees.

  26. [20] Second, only by changing this Deferred Accounting Policy, were the defendants able to declare dividends to Mr Ang and Mr Tan and to themselves as well, a point of much significance, which I shall elaborate on later.

  27. [21] That the defendants were instrumental in effecting the change can be seen in clause 4.2(b) of the 2 EFA (worded in similar terms in Clause 6.2(a) of the 1 EFA) to which the defendants were parties. Clause 4.2 (b) provides that:

  28. [22] This change in accounting policy was effected by the defendants by amending the draft accounts for the financial year ended 30 November 1999 (which had not been signed yet) to remove the Deferred Accounting Policy and recognise the entrance fees due as revenue in full. The 1999 accounts were then signed by the defendants on 26 June 2001. This change in accounting policy enabled the defendants to declare dividends to Mr Ang and Mr Tan, as part of the terms of the sale and purchase of the Company and for their own personal benefit as well.

  29. [24] I am of the view that if the Deferred Accounting Policy that the plaintiff had put in place had continued, the large declaration of dividends would not have taken place and there would then clearly be more than sufficient funds available in the Company to meet the damages of $3,000 per person (in cash) to be paid to the Raffles5000 members and the other members. No Scheme would have been necessary. Faithful adherence to the Deferred Accounting Policy would have been very much in the interest of the members of the Club as unforeseen contingencies would be well catered for and buffered by the reserves in the Company maintained as a result of that Deferred Accounting Policy. Scrapping the Deferred Accounting Policy and stripping the Company almost bare of all its reserves through large declarations of dividends upfront on the other hand, would not be in the members’ interests.

  30. Members’ suit, declaration of dividends and questionable transactions

  31. [25] The Company directors were aware that the members were dissatisfied and were contemplating taking legal action against the Company. At the time the defendants were negotiating to buy over the Company, there were already widespread reports of possible legal action by the founder members for alleged misrepresentations as to the exclusivity of the Club. It was also reported that the Commercial Affairs Department was “looking into the complaints of numerous [Club] members who claim they have been misled by the Club”. Founder members of the Club also began rallying for support for an action to be commenced against the Company for breach of contract/misrepresentation by the Company, as these members felt that the Club had fallen short of the "premier and exclusive" club they were promised. The very first formal letter of demand was in fact sent by one of these founder members of the Club on 25 April 2001.

  32. [26] Fully aware of the potential lawsuits from members, the defendants lost no time in taking active steps to declare large dividend payouts out of the entrance fees collected. As the members were gathering forces to sue the Company, the directors of the Company were busy declaring dividends to empty the bank account of the Company. Such was the picture that was unfolding as can be seen from the events that I have set out below.

  33. [27] On 11 May 2001, dividends of $65 million were declared to Mr Ang and Mr Tan[note: 4]. It was not disputed that the $65 million dividends declared was used to set off the loans of $65 million taken by them.

  34. [28] The very next day on 12 May 2001, the defendants further declared dividends of $5 million to Mr Ang and Mr Tan collectively, as well as $5 million to themselves collectively. Thus, by 12 May 2001, within weeks of the plaintiff ceasing his involvement with the Company, the carefully thought out tax and accounting policies he had put in place were discarded and with that, dividends of $75 million had been declared.

  35. [29] Meanwhile, the solicitors for the Raffles5000 were preparing to sue the Company. A month later on 12 June 2001, the solicitors for the Raffles5000 sent their first letter of demand to the Company, notifying the Company of the Raffles5000’s minimum claim of $120,484,000. In the letter of demand, it was specifically highlighted that:

  36. [30] The concerns expressed in the letter of demand obviously cut no ice with the defendants. Despite the imminent legal action, the defendants went about declaring and approving even more dividends to themselves.

  37. [31] On 1 October 2001, further dividends of $6.5 million were declared by the Company and paid to the defendants. On the same day, further dividends of $24.5 million were declared by the Company and paid to the defendants and the wife of the 1 defendant.

  38. [32] On 15 November 2001, 4,895 disgruntled members of the Club (“the Raffles5000 suit”) filed a representative action in Suit No. 1441 of 2001/Q against the Company over alleged misrepresentations in the Company’s promotional launch material and/or breach of contract. They alleged that the Company had failed to fulfil its promise of establishing a premier and exclusive club and sought inter alia, the return of the $28,000 entrance fees.

  39. [33] Whilst the lawsuit was pending against the Company in the High Court, the defendants and the wife of the 1 defendant systematically withdrew even more dividends: $4.7 million on 23 April 2002, $2.4 million on 3 June 2002 and $7 million on 1 July 2002. This withdrawal of a total of $14.1 million caused the cash holding of the Company (primarily from the entrance fees collected by the Company) to be further depleted.

  40. [35] On 11 August 2003, the Court of Appeal reversed the decision of the High Court holding that the Company was in breach of its implied contractual obligation to provide a premier club by failing to control the total number of people admitted as members, which had resulted in overcrowding in the Club. The Court of Appeal ordered damages to be assessed. Even after the Court of Appeal had decided that the Company was liable to the members and ordered damages to be assessed, the defendants continued to declare more dividends. By 29 March 2004, well before the assessment of damages by the High Court could even be completed, further dividends totalling another $3.5 million had been paid out to the defendants and the wife of the 1 defendant between 21 November 2003 and 29 March 2004.

  41. [36] The High Court finally completed the assessment of damages on 23 February 2005 and awarded damages of $1,000 to each member of the Raffles5000 suit. However by this time, a total of some $125.1 million dividends had been declared and paid out by the Company (based on the approximate figures set out in the summary table below). All this happened after the defendants had become involved with the Company. For more accurate figures, see Annex A which shows the dividends declared yearly from 2001 to 2004, adding up to a total of $124,213,169. Plaintiff’s counsel very helpfully prepared Annex A to assist the court and the contents therein have not been disputed by the defendants. The small discrepancy of 0.7% between the two figures (i.e. $125,100,000 and $124,213,169) does not in any way affect the analysis or the result of this judgment and as such, I will not attempt to reconcile these two figures.

  42. [37] On 23 August 2005, the Court of Appeal in Raffles Town Club Pte Ltd v Tan Chin Seng and others [2005] SGCA 40 allowed the appeal of the members and increased the compensation payable to $3,000 per member.

  43. [38] From the sequence of events set out above, it is obvious that the financial position of the Company quickly deteriorated from a starting healthy position of $206 million in current assets as at April 2001 ([15] above), which but for the subsequent massive dividend payouts (after the defendants had come into the picture) would have been more than ample to pay up in full all the damages assessed to its members in cash, to a relatively unhealthy current position of only $7.5 million in assets and cash reserves of about $1.8 million as at 31 December 2003. The position later in July 2005 was not much better with cash reserves of about $1 million, receivables of $7 million and payment into court of $5.8 million. The Company obviously did not have sufficient funds to meet the claim for damages from members, later ascertained by the Court of Appeal to be at $3,000 per member. If the defendants really intended to have the Company provide a contingency sum to meet the contingent claim of the 4,895 members and to pay the same compensation to the rest of the members to avoid more lawsuits, then the current asset position of $7.5 million plus $1.8 million in cash reserves would have, if fully utilised, catered for a compensation payment of a derisory figure of only $489 damages for each of the 19,000 members (based on the financials for 31 December 2003) or only $726 damages for each of the 19,000 members (based on the financials for July 2005). Even if the number of Scheme creditors of 17,374 was to be used (see [64]), the compensation amounts that the Company could pay out of its current assets and cash holdings would still be the absurdly low figures of $535 and $794 respectively as at 31 December 2003 and July 2005 respectively.

  44. [39] From these numbers that I have computed in the above paragraph (underlined and in bold), it seems to me that the defendants were bent on draining out as much of the available current assets in the Company as they could, which originated principally from the members’ entrance fees, before the finalisation of the assessment of damages by the court, despite knowing that the Court of Appeal had decided against them on liability as early as August 2003. These amounts were way below even the $1,000 assessed in the first instance by the High Court in February 2005.

  45. [40] This severe deterioration in the Company’s financial position was further compounded by the dismantling of the Deferred Accounting Policy in order to be able to declare dividends out of the entrance fees, which resulted in upfront payment of the taxes on the entrance fees without any amortisation. Obviously, to entitle the defendants to pay out the huge dividends (upfront and not on a deferred basis) to themselves as soon as was practicable out of the entrance fees in view of the pending members’ suit and the assessment of damages that was going to follow, there was not much choice but to scrap the Deferred Accounting Policy which prevented them from doing so. Since the defendants were so eager to have the dividends for themselves without delay, then the entrance fees would have to be recognised immediately as upfront income upon collection, and accordingly tax would immediately be payable on them. The deferred basis for treatment of the members’ entrance fees could no longer apply. The defendants were well aware that they could not have their cake and eat it. The decision taken was to dismantle the whole Deferred Accounting Policy and accept instead the upfront tax incidence on the entrance fees so that the declaration of dividends from the entrance fees collected could be proceeded with.

  46. [43] In totality, the systematic dividend payouts plus the associated tax incidence coupled with the questionable expenditures resulted in an almost total depletion of the Company’s cash reserves (amassed from the entrance fees collected). All this took place within a relatively short space of time. By the time the Court of Appeal quantified the damages at $3,000 per member on 23 August 2005, the Company was not able to pay the damages awarded to the members. The Company in that sense was intentionally rendered “judgment proof” by the defendants who had unabashedly and systematically bled the Company dry.

  47. [44] It is obvious to me from the defendants’ conduct that they had declared as much dividends as they could to benefit themselves and entered into questionable transactions, which substantially reduced the cash position of the Company to a very low level with little regard (if any) as to whether or not the Company would be able to meet its judgment debt obligations to the Club’s members after the completion of the assessment of damages. Effectively, the questionable expenditures together with the systematic payouts of huge dividends prior to the finalisation of the assessment of damages was to turn the Company almost into a shell company even before the assessment of damages could be completed before the court. I thus accept the submissions of counsel for the plaintiff that by consciously expediting the rate of outflow of cash from the Company, the defendants had put their own interests above that of the Company’s, the Club’s and the members’, as they knew that substantial damages might soon become payable to the members. What the 2 defendant had written in his letter dated 28 August 2003 to the Club members after the Company lost on the issue of liability in August 2003 before the Court of Appeal would have sounded extremely hollow, were their true conduct with respect to the funds in the Company made known and fully disclosed to the Club members. In that letter, the 2 defendant had the duplicity to state:

  48. [45] For convenience, I have set out below the dividends declared from 11 May 2001 to March 2004.

  49. Dividends declared[note: 5]

  50. Date

  51. Amount of dividends declared

  52. Recipient

  53. [11] May 2001

  54. $65 million

  55. Mr Ang and Mr Tan

  56. [12] May 2001

  57. $5 million

  58. Mr Ang and Mr Tan

  59. [12] May 2001

  60. $5 million

  61. The defendants

  62. [1] October 2001

  63. $6.5 million

  64. The defendants

  65. [1] October 2001

  66. $24.5 million

  67. The first defendant, his wife and the second defendant

  68. [23] April 2002

  69. $4.7 million

  70. The first defendant, his wife and the second defendant

  71. [3] June 2002

  72. $2.4 million

  73. The first defendant, his wife and the second defendant

  74. [1] July 2002

  75. $7 million

  76. NOTE: 22 November 2002, members suit dismissed by High Court.

  77. The first defendant, his wife and the second defendant

  78. [28] December 2002

  79. $0.5 million

  80. The first defendant, his wife and the second defendant

  81. [31] January 2003

  82. $0.5 million

  83. The first defendant, his wife and the second defendant

  84. [8] March 2003

  85. $0.5 million

  86. NOTE: 11 August 2003 - Court of Appeal reversed the decision of the High court and ordered damages to be assessed.

  87. The first defendant, his wife and the second defendant

  88. [21] November 2003

  89. $2.5 million

  90. The first defendant, his wife and the second defendant

  91. [29] March 2004

  92. $1 million

  93. The first defendant, his wife and the second defendant

  94. [23] February 2005

  95. Damages assessed to be $1,000 per member before the High Court

  96. [23] August 2005

  97. Court of Appeal awarded damages to be $3,000 per member

  98. [46] Accordingly, as of 29 March 2004, the defendants had declared a total of $55.1 million to themselves and $70 million to Mr Ang and Mr Tan even before the quantum of damages to the members could be assessed by the High Court. I accept the submission of plaintiff’s counsel that from the 1 EFA, 2 EFA and S & P agreement for the Company (see [14]), it would appear that all the funding for Mr Ang's and Mr Tan's settlement with the plaintiff and the other parties were being provided by the defendants. The reality however was that the defendants planned to and did use the Company's own monies to pay for the shares in the Company which they were buying from Mr Ang and Mr Tan! They essentially got their shares in the Company for 'free' and extracted millions more (at least $14 million more in dividends) over and above that, which directly caused or contributed to the Company’s financial difficulties.

  99. [47] At this juncture, it may be pertinent also to note that when the Court of Appeal’s decision on the assessment of damages was finally made ([37] above), it was well after almost all the remaining funds in the cash-rich Company as at April 2001 had been depleted by the defendants, which depletion was systematically effected between 11 May 2001 and 29 March 2004.

  100. [48] After depleting the Company’s funds, the directors of the Company professed that it did not have sufficient funds to compensate the members of the Club. If the compensation (at $3,000 per member) were only payable to the 4,895 members in the suit, then the compensation required would be $14,685,000. If the compensation were to be extended to all the eligible members (i.e. ordinary members as at March 2001 who paid the $28,000 entrance fee) to avoid subsequent litigation from the rest who did not join in the representative action, then the Company needed to pay out approximately $48,000,000. (Note: Based on 17,374 members (see [64]) it would have been approximately $52,122,000.)

  101. [49] Given the financial circumstances the Company was in, the Company proposed the Scheme under s 210 of the Companies Act (Cap 50, 1994 Rev Ed) (“the Act”) to the members of the Club. Under the terms of the Scheme, Scheme creditors were defined to be those who were members at any time in March 2001 and who were required to pay the $28,000 entrance fee. Scheme creditors would recover the sum of $3,000 in kind, by way of food and beverage vouchers for use in the Club, cash instalments or reduction of transfer fees of membership of the Club or alternatively, a combination of these options.

  102. [50] Understandably, the Raffles5000 were very unhappy with this move by the Company. They must have been extremely surprised and bewildered as well, wondering what had happened to the Club's assets, since it was widely reported that the Club had collected over half a billion dollars in entrance fees (that is, about 19,000 x $28,000) and had an annual income stream of about $20.4 million in subscription fees.

  103. [51] On 31 August 2005, the Company obtained approval of the Court in OS No. 1164 of 2005/Q to convene a Scheme creditors’ meeting for the purpose of approving the Scheme.

  104. [52] The Raffles5000 questioned the Company's motives behind the Scheme, and asked their lawyers to apply on 6 September 2005 for a suspension of any approval of the Scheme and the appointment of a special receiver and manager to look into the Club's accounts. The Chairman of the Raffles5000, Mr Alan Lee, filed an affidavit in support of this application. Mr Lee attested that the collection of entrance fees, subscription fees together with the payment of dividends, and the reported state of the Club's 's financials (as set out in the pro-forma unaudited balance sheets as at 31 July 2005) suggested a dissipation of the Club 's assets.

  105. [53] Despite the demands from the Raffles5000 for greater transparency in the Club's financials, counsel for the plaintiff submitted that the 1 defendant did not answer the queries and instead wrote to the Club members on the following day (i.e. 7 September 2005) appealing for their support for the Scheme, claiming that all the breaches took place before the defendants bought into the Club, thus carrying on the theme that the blame all laid with the former group that was involved with the Club, and that the defendants were themselves, totally blameless. As this letter shows the frame of mind of the 1 defendant, I have set it out in full below:

  106. [54] It is appropriate at this juncture for me to comment that the submission of counsel for the plaintiff at [53] above is not borne out on a proper reading of the entire letter from the 1 defendant to the Scheme creditors. The breaches referred to in the letter were the breaches of contract that occurred in March 2001 for the misrepresentation and the failure to provide a premier and exclusive club and it is factually correct that these breaches took place well before the defendants became shareholders. Counsel for the plaintiff is therefore wrong to suggest that the 1 defendant had in this letter placed all blame for the financial plight of the Company, in particular, the depletion of the Company’s funds, on the former shareholders and directors. Apart from stating a fact which was entirely justified, I find that the main thrust and the predominant motive of the author of the letter was to obtain support for the Scheme and not to injure the reputation of the plaintiff. I cannot infer any evidence of express malice from the above letter.

  107. [55] On 9 September 2005, the update on the Rafflesmembers website included the following questions which were pressing in the minds of the Raffles5000:

  108. [56] Another letter was posted on 12 September 2005 by the Raffles5000 setting out their queries as to the financials of the Club:

  109. [57] The application to appoint a special receiver and manager for the Club on the basis that the litigant-members did not have information on the true financial position of the Club except for an unaudited pro forma balance sheet was however, dismissed by the Court on 22 September 2005. Kan Ting Chiu J (“Kan J”) in his judgment Re Raffles Town Club Pte Ltd [2005] SGHC 178 said:

  110. [58] I note that the Company's counsel had assured Kan J that information on the financial state of the Club would be dealt with in the ES to the Scheme.

  111. [59] Dissatisfied with the decision of Kan J, the Raffles5000 appealed without success to the Court of Appeal for the appointment of a special receiver and manager. Before the Court of Appeal, when faced with the Raffles5000's demands for greater transparency on the financial accounts of the Company, the Company’s counsel reiterated that they would provide the relevant financial information in a detailed explanatory statement, which would be circulated to the Scheme creditors, prior to the creditors' meeting.

  112. [60] Counsel for the plaintiff therefore rightly submitted that the significance of these queries raised by the Raffles5000 and the assurances given by the Company to the High Court and the Court of Appeal which were reported back then, is that many members were asking questions about where the Club's monies had gone to and why the Club was unable to pay $48 million in November 2005, and were being told to look for the answers in the ES. Plaintiff’s counsel is also correct to point out that this is part of the context that this court must keep in mind in construing the alleged defamatory statements complained of.

  113. [61] At this juncture, it is appropriate to point out that with these assurances made by counsel to provide the relevant financial information, it meant that the ES would justifiably not be limited to explaining only the effects of the Scheme but would contain, as promised by counsel to the court, information on how the Company landed up in this financial plight. This background information (containing in part of the defamatory statements complained of) in my view is therefore not extraneous and outside the qualified privilege defence, but is covered by the defence of qualified privilege. I cannot see how the inclusion of background information as promised by counsel to the Court pursuant to the demands for financial information from the litigant members on how the Company ended up with the financial situation it found itself in, will aid the plaintiff in showing any malice on the part of the defendants.

  114. [62] On 30 November 2005, over 90% of the Scheme creditors voted in favour of the Scheme. The Scheme was approved by the court on 6 January 2006.

  115. [63] The Act provides for certain mandatory procedures as follows:

  116. [64] Around 7 November 2005, the Company published and dispatched to the 17,374 Scheme creditors a copy of the 391-page ES. It is not disputed that the defendants, being the sole shareholders and directors of the Company, caused the ES to be published and circulated to all the Scheme creditors.

  117. [65] In the Scheme, “Scheme Creditors” were defined as individuals who were ordinary members of the Club at any time in March 2001 (the date the Court of Appeal had found was the date of breach of contract) and were required to pay the $28,000 entrance fee, i.e., individuals who could have made a claim in the members’ action.

  118. The explanatory statement

  119. [66] The alleged defamatory words are contained in various parts of the ES. The ES gives a description of the present shareholders of the Company and also the persons who were running the Company prior to April 2001 as follows:

  120. [67] It is not disputed that the plaintiff was included in the ES as one of the persons involved in running the company together with the former shareholders prior to April 2001. In fact, the defendants have pleaded that "at all material times from about September 1996 until April 2001, the plaintiff was a beneficial shareholder in [the Company] and was its de facto managing director and/or director". Hence the defendants clearly intended that reference to "director" and "shareholder" to refer to the plaintiff. The plaintiff was therefore named as one of the persons responsible for the acts done which led to the financial difficulties of the Company as described in the following extracts, which the plaintiff alleges were defamatory of him.

  121. [68] The first of the extracts (“Extract 1”) complained of is found at the beginning of the 391-page document, under a section entitled “Background to Company’s Current Financial Difficulties” at p. 15 of the document[note: 6]. The full text of the section is reproduced below. I have highlighted (in italics and in bold) the alleged defamatory words:

  122. [69] The second of the extracts (“Extract 2”) complained of by the plaintiff as being defamatory begins at p. 21 of the ES:

  123. [70] The third and final set of extracts (“Extract 3”) being complained of by the plaintiff is somewhere in an Appendix in the middle of the ES, at pg. 190:

  124. The plaintiff’s case

  125. [71] The plaintiff averred that the typical reader of the ES would be a member of the Club with a direct financial interest in the outcome of the Scheme. He contended vigorously that the ordinary reader would be keen to get to the root of the problem and find out why exactly the Company had gone into financial difficulties, including the issue of whether, and to whom, dividends had been paid.

  126. [72] The plaintiff’s case was that the defendants sought in the ES to place all the responsibility for the Company’s financial woes at the door step of the former shareholders and directors entirely, and in the course of which, the above alleged defamatory paragraphs in the ES, both in their natural and ordinary meaning as well as by way of innuendo, were published. There were allegedly numerous gratuitous and defamatory statements in the ES (set out in bold italics above) deflecting the blame for the Company’s dismal financial situation onto the former shareholders and directors, thus giving the impression that they were the ones, not the defendants, who had almost bankrupted the Company by siphoning out huge sums of money out of the Company.

  127. [73] In the statement of claim, the plaintiff averred that the natural and ordinary meaning of the portions complained of meant and were understood to mean in their proper context within the ES as a whole that:

  128. [74] Further or in the alternative, the plaintiff pleaded that the passages that were complained of in the ES bore the above meanings by way of innuendo, for which the knowledge of extrinsic facts relied on by the plaintiff were the following:

  129. [75] The plaintiff argued that these imputations must be construed in the context of the Raffles Town Club saga. Further, the plaintiff alleged that the defendants sought to deliberately omit the following[note: 7]:

  130. [76] The plaintiff contended that an ordinary reasonable reader of the ES would assume that first, the issue of advance loans which were set off against dividends was authorised by the former directors and/or shareholders (including the plaintiff); and second, that only the former directors/shareholders had approved and benefited from all the dividends, but not the defendants. In other words, readers of the ES would assume that the defendants had not paid any or any substantial dividends to themselves unless the contrary was stated (which it was not) having regard to their portrayal of the Company as being in financial difficulty before they took over and the adverse references in the ES to dividends paid by their predecessors.

  131. The defendants’ case

  132. [77] On the other hand, the defendants submitted that:

  133. [78] The defendants further pleaded the defences of justification, absolute privilege and qualified privilege and denied harbouring any malice against the plaintiff.

  134. [79] The defendants emphasised that it was not the plaintiff’s pleaded case that any part of the contents of the ES was untrue; nor that any of the financial figures contained within the ES were inaccurate. The defendants asserted that all the statements in the ES of which the plaintiff complains are true in their natural and ordinary meaning and the plaintiff has no basis to allege that the statements are defamatory in the natural and ordinary sense of the words used.

  135. Protection of the Right to Reputation

  136. [80] As Dario Milo in Defamation and Freedom of Speech (Oxford University Press, 2008) observes (at p 42), many fundamental rules of defamation law facilitate the protection of the reputation of private individuals. Reputation has a twofold aspect; a private and a public aspect where the court has to consider not just an individual’s sense of self-worth, but also society’s interest in ensuring that the rules of civility among individuals are respected.

  137. Whether the statements in the ES are defamatory of the plaintiff in their natural and ordinary meaning

  138. [81] The first issue that the court has to decide is whether the statements in the ES are defamatory of the plaintiff in their natural and ordinary meaning. A defamatory statement is essentially one which injures the reputation of another by exposing him to hatred, contempt or ridicule, or which tends to lower him in the esteem of right-thinking members of society (per Parke J in Parmiter v Coupland and Another (1840) 6M & W 105 and per Lord Atkin in Sim v Stretch [1936] 2 All ER 1237, Goh Chok Tong v Chee Soon Juan [2003] 3 SLR 32, Macquarie Corporate Telecommunications Pte Ltd v Phoenix Communications Pte Ltd & Anor [2004] 1 SLR 463). This causes him to be shunned or avoided (Youssoupoff v Metro-Goldwyn-Mayer Pictures Ltd (1934) 50 TLR 581). An action therefore lies for any “false, malicious, or personal imputation effected by such means and tending to alter the party’s situation in society for the worse” (Cargill v Carmichael & Anor (1883) 1 Ky 603) and for any imputation that disparages a person in his employment, profession or office.

  139. [82] This prompts the next question: who are the right-thinking members of society; does this refer to the right-thinking members of society in general or right-thinking members belonging to the class to which the statement is published (i.e., the Scheme creditors in the present case)? The answer to this is that the test of whether a statement is defamatory in its natural and ordinary meaning is based on the objective reasonable man test (as opposed to innuendo, where the question turns on whether there are any extrinsic facts which are known to the ordinary reader such that he would put a meaning on the words in the ES that goes beyond the natural and ordinary meaning of the words, and if so, what such meaning might be and whether the meaning is defamatory). In Byrne v Deane [1937] 1 K 818, automatic gambling machines were removed by the police from the club premises. Someone then stuck on the notice boards of the club a typewritten paper containing a verse which ended with the lines: ‘But he who gave the game away may he burn in hell and rue the day’. However, burn was spelt as ‘byrnn’. The issue before the English Court of Appeal was whether the plaintiff’s claim that this was defamatory of him by implying that he had been disloyal to the club should succeed. The court held that this was not defamatory because a “good and worthy subject of the King” would not regard such an allegation to be defamatory.

  140. [83] Whether the words in the ES are defamatory in their natural and ordinary meaning is a matter of construction to be interpreted objectively under the circumstances and in the context in which the ES is published. Three elements must be proved by the plaintiff. First, the statement must be defamatory; second, it must refer to the plaintiff; and third, it must be published and communicated to at least one person other than the plaintiff.

  141. [84] In Microsoft Corp v SM Summit Holdings Ltd [1999] 4 SLR 529 (cited subsequently in Oei Hong Leong v Ban Song Long David [2005] 1 SLR 277 (“the Natsteel case”) at [85]), the Court of Appeal summarised succinctly the principles applicable in determining the natural and ordinary meaning of allegedly defamatory words:

  142. [85] It is therefore for the court to decide what meaning the words would have conveyed to an ordinary reasonable person using his general knowledge and common sense: Jeyaretnam Joshua Benjamin v Goh Chok Tong [1984-1985] SLR 516. For instance, in Capital Counties Bank v Henty (1880) 5 CPD 514, Brett LJ in the English Court of Appeal emphasised that where a number of good interpretations can be put upon words, it is not reasonable to seize upon the only bad one to give the words a defamatory meaning.

  143. [86] In Hartt v Newspaper Publishing (1989) The Times, 9 November, the English Court of Appeal stated that:

  144. [87] The court is not restricted to looking at a literal or strict meaning of the words, but may take into consideration any inferential meaning that can reasonably be drawn by such a person of ordinary intelligence, using his common sense and with his general knowledge and experience of worldly affairs, and having regard to the context in which those words are spoken. In Rubber Improvements Ltd v Daily Telegraph Ltd [1964] AC 234 at 285, Lord Devlin emphasised that the test was the effect on an ‘ordinary’ man. This man neither lives in an ivory tower nor is the ‘logical’ man but is the man on the Clapham omnibus. As the authors of Evans on Defamation in Singapore and Malaysia (LexisNexis, 3 Ed) observe (at p 13), “the ordinary reasonable person reads between the lines in light of his knowledge and experience of worldly affairs”.

  145. [88] Sinnathuray J explained that well-known facts given press coverage may well constitute part of the common or general knowledge of ordinary men and women which the court is required to take into account in deciding what the natural and ordinary meaning of the words are -- Chiam See Tong v Ling How Doong [1997] 1 SLR 648 at [46] to [48]:

  146. [89] Given that the Raffles Town Club saga has been in the media spotlight on numerous occasions, it is evident that the ordinary and reasonable person could well be familiar with the key players and events in the Raffles Town Club saga and that would form part of the context and the circumstances in which the general ambit and scope of the ordinary reasonable person’s general knowledge and experience of worldly affairs would be examined. It is thus reasonable to expect that the ordinary reasonable person receives and does read newsworthy information disseminated through the printed media and other modes of mass communication, and perhaps in today’s interconnected and internet world also, through the e-media. The more widely the dissemination of the newsworthy item is and the more repeatedly it is broadcast, the more likely will the ordinary reasonable person be attributed the common knowledge and awareness of that newsworthy item that then constitutes a part of his general knowledge, which is thus apart from those ‘special facts’ not commonly or generally known which support an innuendo. Consequently, the natural and ordinary meaning should be derived objectively from the words used as understood by that hypothetical ordinary and reasonable person having whatever common knowledge and awareness that he is objectively determined to have, absent any specific extrinsic facts passing beyond the general knowledge of that hypothetical person reading or hearing it. The evidence of the plaintiff as to what he himself understood the words complained of to mean (whether in their natural and ordinary sense, or by way of innuendo) is therefore wholly irrelevant.

  147. [90] On this, I would respectfully adopt what Tan Lee Meng J said in Lim Eng Hock Peter v Lin Jian Wei and Another [2008] 4 SLR 444 when he heard the defendants’ application to strike out the plaintiff’s claim in this suit:

  148. [91] The manner and the surrounding circumstances are crucial considerations that the court has to bear in mind: Markesinis and Deakin’s Tort Law (Clarendon Press, Oxford, 6 Ed) (“Markesinis and Deakin”) (at pp 759-760). While the words may be innocuous in themselves, the general picture they paint of a claimant can be detrimental to his reputation.

  149. [92] The Court of Appeal in Jeyasegaram David (alias David Gerald Jeyasegaram) v Ban Song Long David [2005] 2 SLR 712 (“David Gerald”) aptly summarised at [27] that in determining the meaning of the words alleged to be defamatory, a holistic approach had to be adopted, as it was the broad impression conveyed by the alleged libel that fell to be considered, and not the meaning of each word or sentence under analysis. I accept the defendant’s submission that if there is any portion of the publication that may, of itself, be considered defamatory, the court must go on to consider whether there is anything elsewhere in the same publication that would put the article in such a perspective that a reasonable reader would not reach the conclusion that it is defamatory. In other words, “the bane” and “the antidote” must be taken together. However in my view, whether the antidote is going to be effective in turn depends whether objectively it is of sufficient strength to act as an antidote. If the bane is given very strong emphasis whereas the antidote is hidden elsewhere or is played down to such an extent that its effect as an antidote is not particularly effective in the circumstances when viewed holistically, then the court can still construe the bane as not having been sufficiently neutralised by the antidote in the sense that the ordinary reasonable reader would nevertheless still have reached the same conclusion that the words are defamatory of the plaintiff by having lowered his esteem or injured his reputation. As was stated in Charleston and Anor v News Group Newspapers Ltd and Anor [1995] 2 AC 65 at 70F-H:

  150. Meaning of the offending statements

  151. [93] The plaintiff has complained of several passages in the ES as being defamatory. However, as has been held in Soh Chun Seng v CTOS-EMR Sdn Bhd [2003] 4 MLJ 180, the publication must be considered as a whole, including the circumstances in which the words are used, the prominence given to any headings and the nature of the publication.

  152. [94] In Wu CA v Wang Look Fung & Ors [1981] 1 MLJ 178, the defendant newspaper printed a front page story with a large headline entitled ‘Big probe on lawyers’. Immediately beneath it was a photo of the plaintiff with a caption ‘Mr Wu’. The article involved a client who had lodged a complaint with the Law Society after being dissatisfied with his lawyer. The article further indicated that the Chief Justice had ordered the Law Society to conduct an investigation into the conduct of the lawyer. The article then stated that the client had also filed a similar action against Mr Wu. Although there was a pending action against Mr Wu, there was no inquiry into Mr Wu’s professional conduct by the Chief Justice. The court held that taking the article as a whole, what was crucial was that the plaintiff’s photograph had been juxtaposed immediately under the headline, which created the impression that the plaintiff was the principal subject of the probe.

  153. [95] Upon reading Extract 1, the word ‘Background’ means the circumstances leading up to the event that explains its cause or information that helps to explain why something has happened. To title a particular section “Background to [the] Company’s Current Financial Difficulties” is therefore essentially to suggest that any information that follows will explain why the Company is now in financial difficulties. As an explanation of this, the ES offers the nugget of information that “at the time the new shareholders assumed control, a substantial portion of the monies collected in entrance fees had already been spent”. By putting this statement under the heading “Background to [the] Company’s Current Financial Difficulties”, the juxtaposition of the heading with the offending paragraph immediately underneath would convey to the ordinary reader of the ES that the monies from the entrance fees were substantially gone even before the defendants came on board, and having not much of the monies from the entrance fees left behind, the Company is now or is currently experiencing financial difficulties. The blame therefore is entirely with “all the original promoters, directors and shareholders of the Company [who] have [since] left.” Basically, the current financial difficulties have nothing to do with the defendants who later became “the new shareholders” of the Company. The ES thus kicks off with its attention- grabbing introduction to the “Background to [the] Company’s Current Financial Difficulties” at Extract 1 (p 15 of the 391 page document) by conveying the defamatory meaning that even before the defendants came on board, the funds of the Company had already been substantially dissipated by the former promoters, shareholders and/or directors who had since left, and the new shareholders have nothing to do with the present financial plight of the Company.

  154. [96] Further, while the ES should be read as a whole, Callinan J stated in John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50 (at [26]) that:

  155. [97] He further noted (at [187]) that:

  156. [98] In English and Scottish Co-operative Properties Mortgage and Investment Society Limited v Oldhams Press Limited [1940] 1 KB 440, the Court of Appeal stated that (at p 460):

  157. (1) A high price was paid for the land leased from URA at $108 million;

  158. (2) The cost of constructing the Club was $6,200 per square meter, the highest paid according to Seah Choo Meng, a chartered quantity surveyor, in his 37 years of experience. The total construction cost amounted to $107.6 million;

  159. (3) A “sizeable portion of the entrance fees went towards pre-operating costs for the Club”, the bulk of which were the sales and marketing commissions amounting to some $79.5 million paid to Europa Holdings, which was managed by the former directors of the Company, Mr Ang, Mr Foo and Mr Tan;

  160. (4) The previous management had further drained the Company of its funds by, inter alia, giving large loans of approximately $70 million to the Companies’ former registered shareholders, namely Mr Ang, Mr Tan and Mr Foo. These loans were later off set against dividends declared. Notably no mention was made of the over $54 million in dividends that the defendants declared to themselves out of the Company’s funds;

  161. (5) Directors’ remuneration of some $9.7 million was paid out between 1997 and March 2000. Notably again nothing was stated about the directors’ remuneration paid to the defendants themselves from the time they took over the Company up to the date of the ES.

  162. [100] I accept the submissions of plaintiff’s counsel that the reference to "a substantial portion of the monies", without clarifying the amount that is alleged, is deliberately suggestive that no other expenditure or disbursement is relevant, beyond what is set out in already a fair amount of detail in the section that follows. When something is set out with a fair amount of detail (in particular, down to small items of expenditure of $1.126 million and $9.6 million and without using such words like “inter alia”), one would reasonably expect that all the important details would have been included and nothing significant would be omitted. What is very clear here is that this entire section, which appears on its face to set out comprehensively all the relevant and important events that led to the Company’s current financial difficulties, makes no reference to the very significant dividends of over $54 million paid to the defendants themselves and the 1 defendant’s spouse, nor the other large questionable expenditures spent after the defendants had taken over the Company, for instance, the consultancy fees of $7.7 million and the purchase of the Qilin antiques for $8.75 million. These omissions in my view were deliberate and calculated to mask their own role and to cast substantially all the blame for the Company’s current financial difficulties and mismanagement entirely on the former shareholders and directors, which included the plaintiff.

  163. [101] Having regard to the principles set out in the authorities that I have cited and taking the holistic approach as stated by the Court of Appeal in David Gerald where it was the broad impression conveyed by the alleged libel that fell to be considered, and not the meaning of each word or sentence under analysis, it is my opinion that the ordinary, reasonable and fair-minded reader would regard the statements in Extract 1 as bearing the defamatory meanings as pleaded by the plaintiff at [73] (a), (b) and (c). If the “omitted” facts had been set out in full side by side in Extract 1 giving the history all the way up to the date of the publication of the ES to explain in full the reasons why the financial situation of the Company ended up the way it was, then the entire impression and perspective of the ordinary reasonable reader would have been very different. Had all the facts been fully disclosed in the ES, the ordinary reasonable reader is not likely in my view to be misled to attribute almost all of the culpability for the dire financial situation of the Company and the mismanagement to the plaintiff and the former directors and shareholders, but will probably take the view that it was instead the defendants who had systematically stripped the valuable assets of the Company to the bone and the defendants were truly the ones primarily responsible for the Company’s financial difficulties and the need for the Scheme. The aim of the defendants was clearly to mislead the Scheme creditors into accepting the Scheme by attributing blame entirely to the plaintiff and the former shareholders and directors, and to distance themselves completely from any blame by cleverly keeping secret their own culpable acts from being disclosed in the ES. If what the defendants submit is correct, that the “ES only set out matter-of-factly historical expenditure on major items prior to the Scheme” and “[h]ence, no issue even arises as to what facts ought not to have been “omitted” from the ES”, then this is patently wrong because a very major and recent contributory expenditure of over $54 million dividends paid out to the defendants themselves surely must be matter-of-factly part of the historical expenditure and should never have been left out of Extract 1 so as not to mislead anyone reading the ES. Not only should the payment amount be stated but who it had been paid to should also have been stated as well since the historical expenditure on the other items mentioned in the ES had attributed those disclosed expenditures to the plaintiff and the former shareholders and directors. Burying the information that “..the Company, since its inception, paid dividends to shareholders of $124,213,168” some 150 pages away in another Extract 3, which is an Appendix H to the ES attaching the “Independent Financial Advisor’s Report” does not in my view provide an effective antidote to the defamatory meanings in Extract 1. I further note that the words “since its inception” carries on the deceptive impression that the former shareholders and directors and the plaintiff had also taken the entire $124 million. As an antidote, it is also rather ineffective if it was intended to correct the wrong impression given in Extract 1. The defendants’ argument that there is no omission because the reader can mathematically deduce from the facts set out in Extract 1 that $70 million dividends had been paid to the Company’s former registered shareholders, and therefore one can take the figure buried 150 pages away of $124 million, and subtract $70 million from it to get $54 million, which then constitutes the amount of dividends that ought to have been taken by the present shareholders i.e. the defendants. I think it is very ambitious to expect the ordinary reasonable reader to perform this rather bothersome task and mental linkage between the widely separated Extract 1 and Extract 3. Although I accept the principle of reading the document as a whole, I also have to consider the practical reality of the reasonable reader to normally associate matters closely linked together within the same section in a long document and he would not likely expect to find matters concerning the same issues or matters to be dispersed all over the long document. It is too much to expect an ordinary reasonable reader to put a story together on a particular issue from jigsaw pieces randomly spread out throughout a voluminous document. Applying the standard of the ordinary reasonable reader, that reader, I believe is not likely to perform this convoluted deductive process based on figures set out in two very disparate parts of the ES. In my judgment, the ordinary reasonable reader will still be left with the impressions as he would have obtained upon reading Extract 1 in the ES alone. Furthermore, I believe that the ordinary reasonable reader would not likely have bothered to read beyond the main text which ends at pg 65/391 of the ES, let alone Extract 3 at pg 190/391. See also [117] below for an in-depth legal analysis on the effectiveness of mentioning the $124 million dividend payout in Extract 3 as an antidote to the defamatory meanings in Extract 1.

  164. [102] Turning to look at Extract 2, which is still within the main text at pg 21/391, this concerns a short write-up on the history of litigation that has dogged the Raffles Town Club saga. Words or meanings will not be found to be defamatory if a court determines they would not be so construed by the ordinary reasonable person, even though some actual readers may have taken the words in a defamatory sense. The sense or meaning in which the words were actually understood by the plaintiff is irrelevant (Jeyaretnam JB v Lee Kuan Yew [1992] 2 SLR 310, De Souza Tay Goh v Singapore Press Holdings Ltd [2001] 3 SLR 380, Goh Chok Tong v Chee Soon Juan [2003] 3 SLR 32, Icadam Technologies Sdn Bhd & Ors v CAD-IT Consultants (Asia) Pte Ltd & Ors [2005] SGHC 130). Given that the details are more factual in nature, it is my opinion that the ordinary reasonable reader will not likely view Extract 2 as defamatory of the plaintiff. The plaintiff has failed to prove that Extract 2 is capable of bearing the defamatory meanings as pleaded at [73] (e) and (f).

  165. [103] On the assumption that the ordinary reasonable reader has the patience (which in my view is not likely) to read all the various Appendices totalling 11 in all in the ES from Appendix A to Appendix K, and in particular, Appendix H at pg 190/391 where Extract 3 can be found, then he would have read that a total of $124 million had been paid out in dividends. However, Extract 3 does not mention to whom these were paid. A later portion of Extract 3 sets out the financial position of the Company as at 31 July 2005, stating that the Company’s current cash balance is insufficient to pay the potential damages estimated at approximately $48 million before set-offs. On its natural and ordinary meaning, the words simply describe the dire financial straits of the Company currently, but make no mention of who is responsible for it. The ordinary and reasonable reader therefore, is left to draw their own inferences. The context in which the ES was circulated is however, relevant to the ordinary reader’s impression of the events. By stating that “the Company’s current cash balance is not sufficient to pay the potential damages claim of all Scheme Creditors” after mentioning that a total of $124 million in dividends has been paid out, it is my view, after taking the holistic approach again, that the ordinary reasonable person having the patience to read until Extract 3 will likely draw a linkage with Extract 1 which he would have read as it is in the main text; and that this ordinary reasonable reader would likely conclude that the cause of the current financial difficulties is attributable (at least in part, if not significantly) to the payment of these huge amounts of dividends of some $124 million to the Company’s previous shareholders out of the membership entrance fees collected. I therefore regard Extract 3 as defamatory of the plaintiff with the meanings as at [73] (a) and (d), premised on the assumption that the reader would have continued reading the Appendices and Extract 3 after finishing reading the main text of the ES.

  166. [104] Since I have found that the plaintiff has proved that the statements complained of in Extracts 1 and 3 of the ES are defamatory of him in their ordinary and natural meanings, there is no need for me to consider whether or not these statements are also defamatory by way of innuendo. However, in the event that I am wrong on my finding on this point, I will for completeness consider also the latter question.

  167. Whether the statements are also defamatory by way of innuendo

  168. [105] Looking past the ordinary and natural meaning of the extracts, the next issue to be decided is whether there is some other meaning in the statements which is not defamatory to the ordinary man, but which is defamatory to people with knowledge of the special meaning of the words or of extrinsic facts. As Markesinis and Deakin had noted (at 761), this depends on factors known to the recipient of the statement “at the time of publication” and is something which the “claimant must plead and prove”. For instance, in Tolley v J.S. Fry & Sons Ltd [1931] AC 333, the plaintiff was pictured on a poster with a slab of the defendants’ chocolate protruding from his pocket. He was an amateur golfer and the accompanying caddy compared the excellence of the chocolate with the excellent of the plaintiff’s stroke. The plaintiff alleged an innuendo by the defendants that he had agreed to the advertisement for gain and thus prostituted his reputation as an amateur golfer. The court agreed that it was defamatory. In Jones v Skelton [1963] 1 WLR 1362, Lord Morris observed (at 1370-1371) that:

  169. [106] As the authors of Winfield and Jolowicz Tort (Sweet & Maxwell, 17 Ed) had noted (at 530-531), each innuendo is a separate cause of action and the claimant must identify the persons with knowledge of the special facts to whom he alleges the words were published and prove their knowledge and publication to them. To establish this claim, the plaintiff bears the burden of proving first, that there are facts extrinsic to the words, where such facts give rise to a defamatory imputation; second, that those facts were known to one or more of the persons to whom the words were published; and third, that knowledge of those extrinsic facts could cause the words to convey the defamatory imputation on which the plaintiff relies, to a reasonable person possessing knowledge of those extrinsic facts.

  170. [107] In R Murugason v The Straits Times Press (1975) Ltd [1984] 2 MLJ 10, the plaintiff was an unsuccessful Workers’ Party candidate in the 1980 general election in Singapore. Following the election, he acted as the lawyer in a contested election proceeding involving the constituency in which Mr JB Jeyaretnam had been an unsuccessful candidate. A woman had filed the contested election petition. The defendants published an article concerning the petition. In the article, the defendants purportedly asked the woman’s relatives whether she had acted on her own accord to file the claim. The reply was that reporters should consider whether she acted of her own accord and that they should direct their questions to Mr Jeyaretnam and Mr Murugason, for “after all, she is only a washerwoman and they are lawyers”. The plaintiff alleged that this was defamatory of him by way of innuendo. The extrinsic fact required was that an advocate and solicitor is required to have a brief from a client before he can institute proceedings. Therefore, a reasonable person knowing this fact would draw the defamatory imputation that the plaintiff had acted improperly, unethically, and in a manner unbecoming of an advocate and solicitor.

  171. [108] In this respect, I noted that the press articles had referred to Peter Lim as a "shadow director" and "shareholder" of the Club and the High Court judgment [2002] SGHC 278 dated 22 November 2002 by Rajendran J in Suit No. 1441 of 2001, which was publicly reported, had stated that the plaintiff was “one of the original shareholders” of the Club. It is not disputed that the ES was published to the Club members eligible for the Scheme. These Club members would be especially interested in press coverage of the Raffles Town Club saga and hence, would likely follow closely how the saga was going to unfold.

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